Many people believe that Somalias economy has been in chaos since the collapse of its
national government in 1991. We take a comparative institutional approach to examine
Somalias performance relative to other African countries both when Somalia had a
government and during its extended period of anarchy. We find that although Somalia is
poor, its relative economic performance has improved during its period of statelessness.
We also describe how Somalia has provided basic law and order and a currency, which
have enabled the country to achieve the coordination that has led to improvements in its
standard of living.

Ryan Ford is a graduate student of economics at San Jose State University.

Alex Nowrasteh is an economics major at George Mason University.

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